PT PLN (Persero) is actively implementing coal substitution technology with biomass (co-firing) as fuel for Steam Power Plants (PLTU). This step demonstrates PLN's commitment to support the government's efforts to reduce carbon emissions and achieve the renewable energy mix target of 23 percent by 2025. PLN began using co-firing technology in 2020, and by May 2022, 32 PLTUs had adopted this technology. As a result of co-firing, PLN managed to produce green electricity equivalent to 487 MegaWatt hours (MWh). In an effort to reduce carbon emissions and switch to more environmentally friendly energy sources, there is an urgent need to adopt alternative fuels. Industries that can be a market for biomass pellets include the power generation industry, manufacturing industry, food processing plants, and cement industry, all of which require alternative energy sources that are environmentally friendly. Throughout 2023, PT PLN has used 1 million tons of biomass for 42 power plants across Indonesia. Simultaneously, PT PLN will continue to conduct co-firing trials until 2025 in 52 PLTUs in Indonesia with a ratio of 5% to 10% of total coal usage.
In carrying out co-firing, PLN Group utilizes waste such as sawdust, woodchips, corncobs, and solid recovered fuel (SRF) derived from garbage. To ensure the sustainability of the biomass supply, PLN cooperates with other SOEs, local governments, the private sector, and local communities. The implementation of co-firing technology has reduced carbon emissions by 184 thousand tons of CO2 and greenhouse gases as of April 2022. PLN also invites the community to actively participate in planting biomass plants and managing household waste into biomass pellets. This is expected to support local economic growth.
In the environmental field, PLN has developed a strategy to increase the capacity of new renewable energy (EBT) plants to 20,9 GW by 2030, adjusting supply and demand needs. PLN plans to convert PLTD to EBT, expand gas plants, and maximize the biomass co-firing program in existing PLTUs. Until 2025, the target is that biomass co-firing can be implemented in 52 PLTUs with a total capacity of 10.6 GW and biomass demand reaching 9 million tons per year. PLN is also committed to utilizing the latest environmentally friendly technologies, which will support efficiency, quality, and production costs with a positive impact on the environment.
The progress of biomass co-firing in Indonesia has been significant in supporting the clean energy transition and carbon emission reduction. Here are some of the progress that has been made:
Implementation in dozens of PLTUs: To date, PLN has successfully implemented biomass co-firing technology in more than 30 PLTUs across Indonesia, and this number is expected to increase. This shows the commitment to use biomass as a mixed fuel in PLTU.
Increased Green Electricity Production: Biomass co-firing has successfully produced green electricity equivalent to hundreds of thousands of MWh, helping to increase the contribution of renewable energy in Indonesia.
Reduced Carbon Emissions: Biomass co-firing technology in these power plants has successfully reduced carbon emissions by a large amount, with a target of reducing emissions by millions of tons of CO2 by 2025.
Use of Local Waste: The co-firing program utilizes biomass from various local organic wastes, such as sawdust, woodchips, corn stover, and SRF (solid recovered fuel) from garbage. This not only helps manage waste, but also supports the circular economy.
Infrastructure and Partnership Development: To support co-firing, PLN has established cooperation with various parties, including local governments, the private sector, and communities, to ensure a stable and sustainable supply of biomass.
Long-term National Target: PLN and the government have plans to expand co-firing to more than 50 power plants by 2025, with a target capacity of up to 10,6 GW and biomass demand reaching millions of tons per year.
With this progress, biomass co-firing in Indonesia further demonstrates its potential as a clean energy transition solution and Indonesia's commitment to reducing carbon emissions.
While progress looks promising, biomass co-firing in Indonesia still faces a number of challenges. One of them is a stable supply of biomass, for which PLN and partners need a reliable and sustainable supply chain, as well as adequate availability of high-quality biomass from organic waste and other biomass sources. Another challenge is logistics and infrastructure costs, which involves collecting biomass from various sources across Indonesia, especially remote areas. This requires efficient logistics systems and reliable transportation and storage networks to ensure continuity of biomass supply to the power plant. In addition, investment and technology adaptation are constraints, as the implementation of co-firing requires adjustments to the power plant infrastructure to use mixed fuels, which entails additional costs for technology modifications as well as the management of large amounts of biomass.
The potential for biomass co-firing in Indonesia is huge, given the abundant biomass resources from the agriculture and forestry sectors. In the long term, successful biomass co-firing can help Indonesia reduce its dependence on coal, support the renewable energy mix target, and open up new economic opportunities in the renewable energy sector. In addition, the involvement of local communities in the biomass supply chain can promote local economic development through organic waste management. The future prospect of biomass co-firing in Indonesia is very potential in reducing carbon emissions and increasing renewable energy, with several main aspects, including supporting the 23% renewable energy target by 2025, reducing CO₂ emissions that can reduce up to millions of tons per year, and utilizing agricultural and forestry waste as fuel that reduces dependence on coal and supports the local economy. Co-firing also plays a role in supporting a circular economy by engaging communities in waste management and job creation, and encouraging more efficient and competitive green technologies in electricity production. On the other hand, co-firing opens up investment opportunities that attract investors to develop biomass supply chains and related technologies, while providing a medium-term solution for energy transition that reduces dependence on coal and allows time for renewable energy development.
With the support of government, technology and society, biomass co-firing will become an important part of Indonesia's energy system to accelerate the transition to clean energy and sustainable development. In the context of international trade supporting this energy development, a more competitive pricing strategy is needed to attract global buyers and strengthen the competitiveness of Indonesian products. This strategy can be realized through the application of competitive pricing, such as using the CIF (Cost, Insurance, and Freight) method. With the CIF method, the price offered includes the cost of shipping and insurance up to the port of destination, thereby providing added value to the buyer and increasing the attractiveness of the product in the international market. The supplier is responsible for the shipping costs and risks until the goods arrive at the agreed port. Some of the rules related to CIF include costing and insurance, where the supplier must ensure that the goods are insured until they arrive at the port of destination and the amount of insurance must be sufficient to protect the buyer from the risk of damage or loss of goods in transit. Ownership of the risk passes from the seller to the buyer when the goods load the vessel at the port of origin, but the seller remains responsible for the costs up to the port of destination. In addition, the seller must provide the necessary documents such as bills of lading, insurance policies, and invoices to enable the buyer to take care of the release of the goods at the port of destination. By applying more competitive pricing using CIF, suppliers can provide added value to buyers as key costs and risks are already included, thus making the transaction more transparent and simple for both parties.
Study case
The figure above shows data on the volume of biomass use as a renewable energy source in the last three years (2021-2023) in tons. In 2021, the use of biomass was recorded at 282.628 tons, which shows the early stage of biomass utilization with a relatively small volume compared to the following years. In 2022, biomass use almost doubled to 585.663 tons, which may be due to increased awareness of the importance of renewable energy or increased biomass production capacity. Another large increase occurs in 2023, where biomass usage reaches 990.777 tons, an increase of about 69% compared to the previous year. This indicates that biomass is now an important part of the renewable energy strategy. This upward trend could be driven by various factors, such as technological advancements, policies that support renewable energy, as well as an increase in biomass supply from agricultural, forestry or other industrial waste. Overall, this data shows that biomass has great potential to become one of the pillars in reducing carbon emissions and improving energy sustainability in the future.
The figure above shows data on the Value of Energy Used from the Use of Energy Sources for Electricity Production from various types of energy, both Non-Renewable Energy Sources (such as coal, natural gas, and fuel) and Renewable Energy Sources (biomass), for the last three years (2021-2023) in gigajoules (GJ). The use of biomass for electricity production has increased significantly from year to year. In 2021, biomass use was recorded at 4.719.881 GJ, then more than doubled to 9.780.572 GJ in 2022. In 2023, biomass use jumped again, reaching 16.545.976 GJ, an increase of about 69% compared to the previous year. This increase in biomass use reflects a positive trend in the utilization of renewable energy, with biomass as one of the alternatives to reduce dependence on fossil energy in electricity production.
Compared to non-renewable energy sources, the use of biomass for electricity is still relatively small. In 2023, coal was the largest energy contributor with 1.156.023.031 GJ, much higher than biomass, although its use decreased slightly from 1.176.417.505 GJ in 2022. Coal remains the main source for electricity production. Natural gas use in 2023 was recorded at 429.550.170 GJ, also significantly higher than biomass, with an increase from 393.068.600 GJ in 2022. Fuel recorded a usage of 91.495.327 GJ in 2023, which although lower than coal and natural gas, is still higher than biomass. Although biomass has experienced rapid growth in the past three years, its use for electricity production is still much smaller than that of non-renewable energy sources such as coal and natural gas. This steady increase shows the potential of biomass as an increasingly important renewable energy source, but its contribution to total electricity production still needs to increase if a more sustainable energy mix is to be achieved. A stronger shift to biomass and other renewable energy sources will require policy support, investment in energy conversion technologies and infrastructure to scale up biomass use to compete with more dominant fossil energy sources.
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